Can Michael Burry's Nvidia Short Survive The Stock's Stunning Comeback?

"Big Short" investor Michael Burry placed a significant bearish bet on NVIDIA Corp. NVDA in the first quarter of 2025. Did the "Big Short" pay off or are Burry's gains dwindling as Nvidia makes a remarkable comeback? 

What To Know: Burry's hedge fund, Scion Asset Management, disclosed the first-quarter purchase of 900,000 put options on Nvidia valued at about $90 million to $98 million. 

The puts are leveraged bets that Nvidia's share price will decline by a set date, exposing Burry to potentially large gains if Nvidia falls, but a total loss of the premium if it doesn't drop enough before expiration. 

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Scoin's 13F filings only show positions as of March 31, 2025, so it's unclear if he still holds the puts or has closed them for a profit. Nvidia stock did fall 37% from January to early April, potentially a profitable window if Burry timed his puts well. 

However, Nvidia has staged a remarkable 50% rebound from its April lows. Unless Burry sold near the bottom, much of the fund's gains could have evaporated.

Why It Matters: Burry's bearish bet is a bold wager that the AI boom is overhyped and that macro risks will trigger a tech correction. Nvidia's 50% rebound, driven by new deals and easing trade fears, shows the market remains confident in its long-term prospects and has set aside near-term headwinds. 

Burry's concerns about overvaluation and global risks are not without merit and risks to the AI chipmaker still remain, including export control limitations to China.

Nvidia CEO Jensen Huang stressed the importance of the Chinese market on a conference call Wednesday and warned analysts that whoever wins China will be positioned to lead globally.

Investors will be watching Scion's next 13F filing to see if Burry's contrarian bet against AI giant Nvidia paid off. 

NVDA Stock Price Action: Nvidia shares were up 4.22% at $140.51 on Thursday at publication, according to data from Benzinga Pro. 

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